Liberty Reserve Founder Sentenced To 20 Years In Prison

Arthur Budovsky (42), the creator of Liberty Reserve, a virtual currency before Bitcoin got into the game, was sentenced to 20 years in federal prison. According to the US government, the whole project of Budovsky was a $6 billion money-laundering operation.

For 7 years, starting in 2006, anyone could use Liberty Reserve’s website to transfer money with just little oversight. All the required information was someone’s name, email address, and date of birth. Unlike Liberty Reserve, banks have stricter standards to avoid funneling criminal funds. However, according to federal agents, that’s what Liberty Reserve just turned into, it was a most common payment method for cybercriminals, such as carders and identity thieves.

According to federal court, Liberty Reserve had more than 1 million customers worldwide, including 200,000 in the United States and it had around 12 million financial transactions per year.

The US government found out about Liberty Reserve since it was such a huge operation with very little insight. At the time, they were worried about that terrorists may use this method to fund their organizations. This is the reason why the US government used the Patriot Act to go after the payment processor. The US Treasury Department labeled it a money laundering organization and cut it off from the American financial system.

In 2013, US investigators took over the website and shut it down. In 2014, Budovsky and several of his co-workers were arrested in Spain. Soon after that, Budovsky was extradited to the United States to face court for money laundering and operating an unlicensed money transmitting business. In January, Budovsky pleaded guilty to money laundering and admitted to secretly moving at least $122 million.

Assistant Attorney General Leslie R. Caldwell said in a statement:

“The significant sentence handed down today shows that money laundering through the use of virtual currencies is still money laundering and that online crime is still crime.”

Budovsky and an associate of his, Vladimir Kats, had previously been arrested for a similar digital currency exchange called GoldAge. According to the US government, after their arrests, they both moved to Costa Rica to avoid US law enforcement, Budovsky even renounced his citizenship. Manhattan U.S. Attorney Preet Bharara said in a statement about the case:

“Despite all his efforts to evade prosecution, including taking his operations offshore and renouncing his citizenship, Budovsky has now been held to account for his brazen violations of U.S. criminal laws.”

2 comments

How could you give this guy 20+ years for something that didnt do anything to anyone? Millions of child molesters, and rapists get 10 years. Justice system needs to fucking fix this issue. Justice system are the definition of hitlers army. Enough is enough, give people the right sentences, quit trying to mass incarcerate prohibition acts and freedom acts. The man didnt do crap but simply make it safer for people to send money and receive money.